We analyze the incentives of internet service providers (ISPs) to break net neutrality by excluding competing one-way essential complements, i.e. internet applications competing with their own products. A typical example is the exclusion of VoIP applications by telecom companies offering internet and voice services. A monopoly ISP may want to exclude a competing internet app if it is of inferior quality and the ISP cannot ask for a surcharge for its use. Competition between ISPs never leads to full app exclusion but it may lead to a fragmented internet where only one ISP offers the application. We show that, both in monopoly and duopoly, prohibiting the exclusion of the app and surcharges for its use does not always improve welfare. JEL classification: L12 L13 L51 L96

This article provides a conceptual framework to help define relevant markets in the presence of two-sided intermediaries and competing business models. In particular, we argue that two-sidedness is not a feature of markets but of firms and, hence, that firms with different business models may compete within the same relevant market. We then apply the proposed framework to the Google Shopping case.

We analyze the incentives of internet service providers (ISPs) to break net neutrality by excluding internet applications competing with their own products, a typical example being the exclusion of VoIP applications by telecom companies offering internet and voice services. Exclusion is not a concern when the ISP is a monopoly because it can extract the additional surplus created by the application through price rebalancing. When ISPs compete, it could lead to a fragmented internet where only one firm offers the application. We show that, both in monopoly and duopoly, prohibiting the exclusion of the app and surcharges for its use -a strong form of net neutrality-is not welfare improving.

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Using ever-increasing amounts of data, firms are able to link the valuations of consumers with the information they possess about a product. We analyse the impact of that new ability on the advertising strategy of a monopolist. If there is a positive correlation between consumers' valuations and their information then, in contrast to the literature, better targeting often reduces prices. A lower price does not necessarily lead to a higher consumer surplus: some high-valuation/high-information consumers may stop purchasing because they stop receiving ads. Because of the interplay between the targeting and the pricing strategies, consumer surplus and welfare may be increasing in the advertising cost. Finally, we highlight that the link between valuation and information poses new problems for the estimation of returns to advertising.